Social enterprises in Scotland make a profit like any private business but then use that money to do good – Chris Martin

After being buffeted by the Covid pandemic, the economy now faces a daunting new challenge amid the steepest fall in living standards since the 1950s.

Social enterprises come in many different forms. The Camarados set up a public living room in a street in Falkirk to promote mental health awareness (Picture: Michael Gillen)

Recovery and renewal will take time, but it is vital that we don’t just revert to the way things were. Fairness and equality should be at the heart of our economy, and Scotland’s social enterprises will play a leading role in this.

You may be aware of a social enterprise running a local supermarket, art gallery, nursery sports centre or café in your local area. However, you might not know that social enterprises generate more than £2.3 billion for Scotland’s economy, supporting more than 88,000 jobs. Around two-thirds are led by women, and around one-third are located in rural parts of Scotland.

It is a diverse community and the ‘more-than-profit’ approach, which is at the heart of the social enterprise movement, is used by a huge range of organisations, of every size, operating in most sectors of the economy. The model works for many markets – selling goods and services to individual consumers, local authorities, government and private businesses.

While the aim is to make a profit just like any private sector business, those profits or surpluses are then reinvested back into social and/or environmental purposes.

According to the most recent census in 2019, there are more than 6,000 social enterprises in Scotland – and early data insights ahead of the publication of the 2022 figures show an increase, despite the impact of the pandemic.

There are certainly some tough times ahead for businesses, as well as households, however it is social enterprises which hold the key to delivering the transformative economic change for local communities and people that our country will need.

The Scottish Government has set out a wide-ranging strategy to develop the potential of social enterprises, with three priorities: stimulating the sector; developing stronger organisations; and realising market opportunities.

Cabinet Secretary Shona Robison has said that “Scotland’s vibrant and innovative social enterprise sector must continue to be ambitious, driving our well-being economy with a dynamic offer that delivers nationally and internationally”.

And this week, Nicola Sturgeon encouraged businesses to adapt to new ways of working to boost the economy in the wake of the pandemic. The First Minister wants new ways of working that will help achieve a more resilient economy and a wealthier, fairer and greener Scotland.

At Social Enterprise Scotland, we can help deliver this approach; which has cross-party support throughout the Scottish Parliament. From Friday, we have been chosen by the government to become what we are referring to as the ‘single enhanced intermediary’ for Scotland’s social enterprise movement.

It will be our job to grow a strong, inclusive voice for all social enterprises. That means engaging with grassroots social enterprises, rural groups, social firms and community-led work in deprived urban communities to ensure that they are all supported.

It also means we will be held to account for the public money received to ensure that all types of social enterprise are held in equal esteem and share best practice across the sector.

It’s an energising time for the movement, with a ‘transition group’ established to support the shift to a single body, led by Ian Welsh OBE, who was chief executive of Health and Social Care Alliance Scotland. Community conversations are also happening across the country.

There are so many different types of social enterprise that can help build a fairer economy. Co-operatives and mutuals give members, customers or employees a direct stake in the business.

There are social firms which are set up to create employment and meaningful work, including training and volunteering, for people who face significant barriers to employment.

Community interest companies (CICs) are created by people who want to conduct a business or other activity for community benefit, and there are currently around 1,500 of these in Scotland.

Development trusts are community owned and managed organisations focused on the economic, social, environmental and cultural needs of their community, numbering more than 250 in Scotland.

With the cost of living on the rise, credit unions are a type of co-operative that have an increasingly important role to play. Many operate in areas of social and financial exclusion, although more employers now offer credit union membership – and they are increasingly being used by ethical consumers.

The largest now offer a competitive range of mainstream financial products. Today, there are around 90 credit unions in Scotland, serving almost 415,000 members.

Finally, housing associations are providing affordable housing for both rent and sale. With property prices continuing to soar, the availability of affordable housing is vital.

Housing associations give priority to those in greatest need and reinvest any surplus income in maintaining or adding to their housing stock. Additionally, many support other social enterprise activity through community regeneration and tenant support.

As we prepare to become the ‘single enhanced intermediary’, we are committed to democratising the voice of social enterprises in Scotland to ensure all social enterprises, whatever their size, have an equal voice, as well as a stronger voice. It is about growing a collaborative movement.

Other companies can also support the positive impact of social enterprises by using their procurement power to buy services and goods that deliver social impact.

Consumers can play their part by buying products and services from social enterprises – making a real difference with their purchases.

This is an incredibly exciting time for our sector as we prepare to successfully deliver a new inclusive model that will put social enterprises at the heart of Scotland’s future.

Chris Martin is chief executive of Social Enterprise Scotland